Wednesday, December 02, 2009

End of the Road

After Detroit, the wreck of an American dream

by Ben Austen

Harper's Magazine (August 2009)

Bill Londrigan was a researcher with the AFL-CIO's building-trades division when, in 1986, Toyota broke ground for its first fully owned US assembly plant, on a tract of Kentucky farmland twelve miles north of Lexington. Honda and Nissan had recently opened their own non-union facilities in the United States, and organized labor feared the consequences of losing further ground in the auto industry. Londrigan was part of the contingent sent from Washington to prevail upon Toyota to hire union builders; he ended up staying on in the Bluegrass Region, and in 1999 he was elected president of Kentucky's AFL-CIO. When I visited Londrigan late last winter at the union's state offices - two rooms in a store front three miles from downtown Frank fort - he flipped across his desk a booklet that he had prepared for the battle with Toyota two decades earlier. The pamphlet detailed the scope of the vertically integrated supply chains, called keiretsu, that Japanese car companies had brought with them to America from Japan and that some believe violate US antitrust laws. On its cover was a black dragon hovering ominously above the middle United States. Londrigan guided me to a specific passage and then began to read it aloud. "The euphoric welcome Japanese keiretsu factories receive when they announce their locations in American towns and counties is reminiscent of the Trojans' joy when they first viewed the Trojan Horse. The historical warning that sad episode produced - 'Beware of Greeks bearing gifts' - seems to be lost on this generation of Americans, or has at least escaped the attention of US economic development officials".

Londrigan waved his hands in disgust. "I said back then that in the long run this wasn't going to be a good thing. Guess what? The long run is here".

States in the South and lower Midwest did euphorically welcome Japanese car manufacturers; indeed, they paid for the privilege of opening the gates. To land Toyota, in 1985, Kentucky outbid thirty-five other states by offering $147 million in direct investment, nearly twice what Illinois used to lure Mitsubishi earlier that same year and five times what Tennessee gave Nissan in 1980. In addition to nearly boundless governmental support, financial and otherwise, these regions had failing agrarian economies with little competing industry and a glut of prospective employees. At the plant Toyota opened in Georgetown, Kentucky, assembly jobs lacked the pensions and benefits enjoyed by members of the United Auto Workers union, but they did offer pay that was close to the standard set in Detroit and well above the state's industrial average of roughly $8 an hour. For the first 3,000 openings, applications poured in from 142,000 Kentuckians, of whom 28,000 were chosen to undergo a multistage winnowing process that lasted two and a half years. With their younger, more carefully selected, and non-union work forces, Japanese automakers were able to run their US plants with far greater flexibility than their American competitors could. At Ford and General Motors factories, the number of different job classifications ran into the hundreds. At Toyota, the number was three; the Honda facility in Marysville, Ohio, had only two. Workers at these non-union plants were rotated wherever needed. Tooling and other skilled labor was contracted out, often to firms the companies controlled, and temporary employees were added or culled depending on swings in demand.

Since 1986, GM, Ford, and Chrysler have collectively lost a quarter of the US market, with their combined sales dropping from 72 percent to 46 percent at the end of last year. Even before Chrysler's and GM's recent bankruptcies, the so-called Big Three had shed nearly half a million hourly employees since 1985. General Motors, the largest company in America for much of the past century - with, at its 1970 peak, 395,000 union employees working in 150 US factories - planned to survive the current crisis by slimming its workforce to 38,000 union laborers and 34 plants. GM's competitive disadvantage has most often been illustrated by the $50 billion it owes its retirees in health care and other benefits, a fixed cost that, critics of unions like to argue, adds an additional $1,600 to the price of every vehicle produced. But this statistic is misleading: the staggering inefficiencies of American auto companies go far beyond any gains that once were won by labor. For the past two decades, the three car manufacturers have spent less than their foreign rivals on the development of new fuel-efficient cars, focusing instead on ever-bigger SUVs and light trucks. GM's failure to successfully manage costs - as well as its own size - can be seen in its 13,650 US dealerships, with each one, even in 2007, selling an average of only 280 cars; Toyota, by contrast, had 1,450 US dealerships selling 1,800 cars apiece.

With Detroit in shambles and showing few signs of recovery, I traveled to central Kentucky this winter to witness what has become the unchallenged model for how cars are made in America. Toyota is currently the world's leading automaker, and its Georgetown plant is the company's largest facility outside of Japan. It is Toyota, not General Motors, that now sets pay and work standards for the industry. Veterans at UAW plants still earn an average of $28 an hour, and long-serving workers at Toyota Georgetown make upwards of $26. But hourly wages at Toyota's new San Antonio plant top out at only $20, and workers at the recently opened Honda factory in Greensburg, Indiana, earn at best $18 an hour. Moreover, the starting hourly wage for full-time employees at all non-union automakers is now in the low teens - a pay grade that has already been adopted by the American car companies.

What is collapsing along with Detroit is an American archetype, the premier twentieth-century dream of what it means to be a manufacturing worker in this country. From the $5 day at Ford in 1914 through the yearly cost-of-living raises and benefits negotiated by the UAW, the auto industry came to symbolize blue-collar upward mobility and empowerment. The real income of autoworkers doubled from 1947 to 1973; and because many other union as well as non-union firms adopted auto-industry pay rates, the bottom half of American earners saw their income increase during this period at the same pace as that of the top ten percent of wage earners. But with auto plants now closing and jobs furloughed, with UAW contracts renegotiated and defined benefits swapped for stock in greatly diminished companies, the archetype is no longer operative. UAW membership fell from 1.5 million in 1979 to 460,000 by the end of 2008, and it is sure to drop further. With the future of the Big Three in doubt, what remains of organized auto work also hangs in the balance.

Before I left Londrigan's office, he described for me a moment, a quarter-century ago, when a different outcome in the South had seemed possible. Negotiations between the unions and Toyota over the building of the Georgetown plant were at an impasse. During one meeting, eleven union representatives sat motionless across a table from their Toyota counterparts. Then, all at once, the union men methodically unlaced their ties and pulled them taut across their foreheads, knotting the fabric in the back. "It was the ceremonial hachimaki", Londrigan said proudly. "We were demonstrating our total commitment, that we were engaging in mortal combat". After a few tense moments, the Japanese in the meeting came around the table to shake hands with the union reps. Although the event signaled the start of a protracted fight, Londrigan felt that the two sides were finally viewing each other as equals. "They respected us", he said. Eventually, Toyota would agree to the use of union construction workers; Honda would follow by hiring union labor to build its new engine plant in Ohio. But the labor victories pretty much ended there. In 2009 it is hard not to see Londrigan's anecdote as a relic from a more hopeful era, a scene that could have been pulled directly from the Michael Keaton movie Gung Ho, released around the same time as that meeting. In the film, plucky union workers and the hidebound Japanese who take over their auto plant in the American heartland come to understand and appreciate one another. As a result, the unionized workers, the foreign-owned company, the town, and even the auto industry itself all benefit. The movie's tag line: "When East meets West, the laughs shift into high gear".

Toyota's Georgetown facility sits on 1,300 acres of land that - like the entire surrounding area, where ten hotels, housing developments, several malls, and three successively larger Walmarts have now bloomed - was undeveloped bluegrass right up until the carmaker's arrival. It once was thick with canebrake, ash, hickory, and burr, at the time when white settlers from Virginia would have encountered Shawnee or Creek there. For a century, farmers and their slaves worked hemp and tobacco; cattle and horses grazed the fields. Today, what grows on the land are Camrys, Avalons, and Venzas, about half a million in most years.

The past year, of course, has not been like most. Toyota's US sales have dropped by roughly forty percent, and at the start of this year the carmaker posted its first ever operating loss, a $4.4 billion deficit for 2008. On the day I saw the Georgetown plant, the assembly line was moving at an octogenarian's amble, about sixty percent off its normal pace. "You have to look carefully and say to yourself, 'Is that line really moving?'" a worker on engine assembly said to me. In Toyota's "lean" production system, any wasted motion or activity, known as muda, is anathema, and workers are expected constantly to seek ways to increase efficiency and productivity. At the reduced line speed, however, muda seemed a little more tolerable and continuous improvement a less pressing concern. A few team members smiled and waved as I was driven by on an electric cart. A young worker in a University of Kentucky basketball jersey leaned rakishly against a slowly moving hull, while an older redhead seated directly beneath him dangled her crossed legs out the car's doorless frame. I watched another worker perched atop a giant mechanical arm, which extended to thrust him into each passing car. The contraption, originally built from a bass-boat seat and then repeatedly improved upon, allowed the worker to reach all four windows of a car in a matter of seconds with almost no shifting of his body. Because assembly-line work generally involves tasks that are not difficult to perform one or two times but that become arduous, even painful, when done hundreds of times over many hours, an apparatus like this reduces physical strain as well as production time. When the arm retracted, the worker used the extra time between cars to pick up an ongoing conversation with the team member one step up the line. I heard the other worker, a tall man wearing safety goggles, say emphatically, "And that's why you use Shake 'n Bake".

I was introduced to the plant president, Steve St Angelo, as he walked alone near the assembly line, past little robotic delivery carts and men on three-wheeled bicycles. recently was named a managing officer of Toyota, one of only a handful of non-Japanese among the elite group of fifty, and I was told that his presence on the factory floor epitomized the unique democratic culture of the plant. Toyota's North American factories have no separate parking spaces, bathrooms, or cafeterias for executives. Upper management and line workers dress similarly and receive the same benefits. The second tenet of the "Toyota Way", after "continuous improvement", or kaizen, is "respect for people". And as part of its commitment to workers, the Georgetown facility includes a credit union and pharmacy, a fitness center, a picnicking area, a nature trail, twenty-four-hour child care, and a memorial site, where the names of deceased employees are etched into a marble obelisk. Businesses have long spent lavishly to win the devotion of workers and to weaken the appeal of competitors and labor agitators. But Toyota also claims that its workers take part in decision-making at the plant - through their ability to pull an "andon cord", which stops the line when a problem is spotted; the open communication with team and group leaders; and the roundtables at which randomly chosen workers are asked to share ideas and concerns with . "Team members here have a voice", Rick Hesterberg, the plant spokesman, told me. "Workers ask themselves over and over, 'What can a third party do for me that I'm not already getting?'"

Hesterberg had arranged for me to meet with two workers at the factory visitors' center, which is set up as a sort of museum of the company and plant. Eric Everhart leads a team on the same engine-prep line he has worked on for the last twenty years. His wife has been an employee of Toyota for nearly two decades as well, and all four of their children have moved through the company's on-site child care. "We're a Toyota family", Everhart said with a bit of a laugh. Through a Toyota program, he took college classes for free at the plant, and he was now just a few credits shy of a degree in business management. Renee Brown worked at a Dairy Queen in eastern Kentucky before coming to Toyota ten years ago as a temp; it took three years for her to be hired full time. The plant has an unwritten policy that a temporary worker's stint lasts only two years, at which time the worker is either sent back to the temp agency or, less likely, hired full time. This time limit was set in 2003, after the company was publicly criticized for keeping some workers on temporary status for five and six years. Brown believed that the precariousness of temping was still well worth the potential reward of a full-time position. "You know the stats as a temp", she said. "You make less, you know there's a chance you won't be needed, but you hope. We all look for the bright light at the end of the tunnel."

In February, just weeks before my visit, the plant had announced it would cut executive pay, eliminate overtime and bonuses, and offer a buyout to its hourly employees. Worse, all of the plant's 650 temporary workers, roughly a tenth of the total work force, were let go. When I asked Everhart about these cuts, he seemed unfazed. "If you're not making changes - not just here, but in America - you're setting yourself up for disaster", he said. "We're preparing as a family" {*}. It's true that everywhere in the country, and especially in the automotive industry, companies and their employees were rewriting the rules. In 2007, workers at the Georgetown plant were suddenly required to pay a portion of their health-care premiums, and that same year an internal report, leaked to the Detroit Free Press, revealed that the facility planned to reduce hourly wages so that they were more in line with central Kentucky's industrial average. And these changes were undertaken even before the downturn, which has seen the plant eliminate many of the small perks of the Toyota work culture. In April, it took away the petty cash allotted to work units for lunches together, and in the weeks after Everhart and I met, it would end the on-site college classes he was attending.

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{*} Although cost-saving measures at union automakers have been far more severe, union rules require that workers at least agree to cutbacks first. In fat times or lean, Toyota's explanation of changes has remained basically the same: To ensure long-term financial stability, management is considering the following. Details will be shared in the upcoming months with team members. Also, unlike UAW members, workers at Toyota and other non-union plants haw no one representing their interests in the larger political sphere, no one lobbying on their behalf for a redesign of the health-care system or the enforcement of stricter occupational and health standards.
_____

On a Saturday morning, with temperatures in the low forties, I drove the twenty minutes from Georgetown to Lexington to watch a group of Toyota workers immerse themselves in wintry waters for a Special Olympics fund-raiser. I had anticipated a rustic bluegrass setting for the Polar Bear Plunge - a misty lake or secluded swimming hole; a glen, undulating hills, a banjo, maybe thoroughbreds. Instead, a circular pool fifteen feet in diameter had been set up in the parking lot of a Texas Roadhouse restaurant, which was situated in a vast strip mall off of Man o' War Boulevard. A banner on one of the mall's two anchor stores announced the availability of its 22,000 square feet of retail space. The identities of other shuttered businesses could be made out from the ghosted lettering of signs recently removed. About two dozen Toyota employees, many in costume, had assembled at a company tent near the restaurant. When Toyota was announced as a Polar Bear Plunge sponsor, a crowd of two hundred or so cheered politely. The applause was significantly louder when Steve presented the event's organizers with a poster-board check for $14,459.

Like countless other companies, Toyota knows that increasing the number of people and institutions invested in its future prosperity is good for both public relations and business. When the carmaker first moved to Georgetown, the seat of Scott County, it had to work especially hard to demonstrate that its own prosperity could be a boon to others. Initially, locals feared that the new plant would compromise their small-town way of life, and Toyota faced lawsuits not only from union activists but also from landowners and municipal officials. The company responded to the ill will by inviting every local dignitary imaginable to the plant's dedication ceremony, at which it presented the city of Georgetown with ten new white Camrys. Toyota also quickly announced a $1 million gift to the city, which was used to purchase an old monastery and convert it into a community center. The plant's president at the time, Fujio Cho, bought a house in Georgetown and joined several community organizations. His son enrolled at Georgetown College, which soon was able to convince the Cincinnati Bengals to choose its campus (home of Toyota Stadium) as the site for their summer training camp. Additionally, Toyota requested that the plant, officially located just outside the city limits, be annexed to Georgetown, thus helping to fund numerous development projects. (Georgetown's revenues from payroll taxes increased from $531,000 in 1985 to $6.8 million in 1996.) On Main Street, aluminum siding was torn from buildings and their Victorian-era features were restored; wires were moved underground, sidewalks bricked; walls were painted with signs for defunct, turn-of-the-century stores, the advertisements carefully designed to look like time-faded originals. The major newspapers in the region, at first critical of the Toyota deal, now extolled it. A 1988 editorial in the Lexington Herald-Leader declared Toyota's presence in Scott County a "match made in heaven, come to reality in the rolling fields of Kentucky".

At the Polar Bear Plunge the Toyota team members reached a platform above the pool and jumped in twos and threes, the women often with linked hands. One of them didn't fully submerge, and the crowd emitted a low groan. "She didn't go under", a man next to me said, as if registering a personal insult.

I spotted three Japanese men standing on the perimeter of the parking lot, bundled in parkas and heavy leather coats, and I walked over to say hello. All managers at the Toyota plant must attend at least one volunteer event a year, and these engineers had decided today would be their day. All three men lived in sections of Lexington that were popular among the Japanese expats from Toyota and its various suppliers, areas that, over the years, had seen the arrival of a nearby Japanese language school as well as many Japanese restaurants and groceries. When, in a rehearsed manner, one of the three praised Kentuckians for their friendliness, the other two nodded in agreement. At no point during the event did I see any of them share a single word with a co-worker or a local.

Steve St Angelo was also standing on the outskirts of the crowd, and as volunteers from other organizations leaped into the pool, he chatted with me about his years in the car industry. He had begun his career at General Motors, starting on the line there at age eighteen and working his way up to executive positions at GM factories in Michigan, Ohio, and Ontario. Before coming to Georgetown, he had run a unique plant in Fremont, California, that was a partnership between GM and Toyota: after GM closed the facility, Toyota agreed to reopen it and use the laid-off UAW workforce to build, under Toyota's own production system, Chevy Novas and Corollas, while GM remained in charge of marketing. Fremont soon became one of the country's most efficient auto plants, and this success inspired GM to undertake its most innovative bid to measure up to the Japanese - the launch of Saturn, in 1985. Operating under a separate UAW contract, labor and management at Saturn's plant in Spring Hill, Tennessee, were to work cooperatively at all levels. Workers were divided into self-managed teams that did their own hiring, developed their own policies, and elected their own leaders. Most radically, union representatives would work alongside management in every Saturn department, and labor would be involved in all organizational planning, including the relationships with dealers, suppliers, and stockholders. "It would be a terrible shame if Saturn fails", Lynn Williams, the former president of the United Steelworkers, said in 1997. "It would signal an enormous setback for efforts many of us have made to change the course of labor relations in America".

Of course, Saturn has failed. In June, after filing for bankruptcy, GM reached an agreement to sell the once-popular brand to Penske Automotive Group. GM's mismanagement of Saturn was epic: it allowed eight years to pass before introducing a new model of the original design. But employees at the Spring Hill plant also found that their union representatives couldn't serve the interests of both the company and its workers; many said in interviews that worker participation was just a means for management to squeeze more labor out of an understaffed work force. In 1998 the rank and file voted out the union reps most closely associated with the partnership model, and after production of Saturns was moved from Tennessee to an existing GM plant in Delaware, the labor experiment was scrapped and workers joined the master GM-UAW contract.

St Angelo told me that the "brotherhood" at his non-union plant in Georgetown was stronger than at the union plant he had run in Fremont. He saw the company's influence in the community of central Kentucky as a natural extension of this family culture at the factory. Toyota representatives served on nearly every board, committee, and industrial-development group in the area. It was not uncommon, he said, for the governor, the Georgetown mayor, and county officials to spend time at the facility. "I have to tell you, decisions are almost more difficult to make without a union", St Angelo confided. "Instead of negotiating with a few representatives, we're negotiating with several thousand. We can make better arid faster decisions, but we have to take into consideration how they affect team members, the company, and the community."

In the current downturn, he said, he constantly walked the assembly lines - first, second, and third shifts - to talk to workers and find out what they were thinking. "The common theme I hear: 'We don't like to lose our bonus, but we understand. We're praying for you.' That's what they say, 'We're praying for you'." He told me about a team member who is writing a book about what Toyota means to him. The worker sends St Angelo chapters as they are completed. "Some of it brings tears to my eyes. It's amazing stuff." For Christmas, St Angelo said, he dresses up as Frosty the Snowman or Rudolph or some other character and brings gifts to the children at the on-site day care. Pictures from the exchange are shown on closed-circuit televisions throughout the plant. "These are the children of my workers", he said, leaning in close. "Do you know what it's like when you see that, when you see a picture of your child with the president of the plant? It's a good feeling. You think, 'That's my kind of president'".

When I later spoke to several Georgetown Toyota workers I met through the local UAW office, one of them described reacting differently to St Angelo's holiday munificence. Tim Unger, who has worked at the plant since 1989, said it had become a custom for St Angelo to shake the hands of all the line workers a couple of days before Christmas and give them Tootsie Pops. But the routine varied a bit last December. "It was very well organized that we were going to stop the line at about ten minutes before break and everyone would congregate on the main aisle ways. This was mandatory", Unger recalled. "And here comes Steve St Angelo. He's got a pimp hat on and some crazy jacket, like a clown, and he's giving out ... Now, a Tootsie Pop I like. He's giving out Dum Dums. There's nothing in a Dum Dum. It's hollow. It's just a sucker. I think, this is a metaphor: him dressed up as a pimp, and me getting a sucker - a Dum Dum."

At Yuko-En on the Elkhorn, the "official Kentucky-Japan Friendship Garden", native Kentucky flora is arranged in a traditional Japanese stroll style. Located on the north fork of Elkhorn Creek, the garden was built in 2000 with donations from Toyota and Georgetown's sister city of Tahara, Japan, the home of another Toyota manufacturing plant. Bur oak and blue ash grow beside stone snow lanterns; canebrake lines a koi pond. Local limestone and Elkhorn Creek pebbles form the Zen rock garden. Each year, all third graders in the county are brought to Yuko-En, where they are taught lessons on water quality and martial arts.

Just beyond Yuko-En on the Elkhorn's western bluff, behind the Momiji Garden and a partially built bonsai house, is a large field that belongs to Cardome, the community center that was previously a monastery. The pasture is the site each spring of the Georgetown International Kite and Culture Festival, an event created in conjunction with Tahara. Later in the season, the same field hosts an elaborate Civil War reenactment that celebrates the achievements of John Hunt Morgan, a Confederate general who marched through Indiana and into Ohio, the deepest incursion into Northern land by any Southern force. Captured ninety miles shy of Lake Erie, Morgan later tunneled under the walls of the Ohio State Penitentiary and found his way back to Georgetown. The town's Confederate sympathizers lined the streets in welcome, and Morgan's remaining troops responded in turn by looting homes and businesses. In all, Scott County produced six Civil War generals - four who fought for the South and two who fought for the North - as well as Kentucky's simultaneously serving Confederate and Union governors. It is said that after the war the county lost its way, falling from a position of privilege and influence within the state that it did not regain until the arrival of Toyota.

Even with Toyota in town, Georgetown was suffering under the current economic downturn. The pain was nothing like what was being felt in, say, Pontiac, Michigan, but when I visited John Simpson, the director of the local tourism commission, he lamented the county's recent decision to cancel this year's kite festival. He pointed to a Japanese fighting kite, decorated with a vibrantly hued samurai figure, that officials from Tahara had presented to him and that now hung on his office wall. Later, Simpson drove me around to the county's various attractions, and as he turned the car onto Cardome's sprawling meadow, he told me that Morgan's Raid, too, would be skipped this year. He became a bit wistful as he tried to make me see the cannons that would not be aimed downward from the ridge-line, the men in Union uniforms who wouldn't be cooking their beans in the valley to the left, the Confederate tents that wouldn't dot the landscape. But he assured me that Georgetown's largest annual rite, a three-day celebration of everything equine, would not be canceled. The event commemorates Scott County's horse heritage and culminates with the Toyota Grande Parade down Main Street.

Ten years ago, officials from Toyota and Scott County Schools together developed a course of study, called Quest, that was based on the car company's problem-solving methods and "lean thinking". This Toyota curriculum is now taught to students in the county's public schools, kindergarten through twelfth grade, and juniors and seniors can learn about the efficiencies of Toyota's production system in the high school's Manufacturing Academy. Toyota and the school district also helped bring a technical branch of Bluegrass Community College to Georgetown. Although its permanent home has yet to be built, the college is currently offering industrial-maintenance classes at the Toyota plant, in a hangar that houses the automaker's own training facilities. Any student who passes the Manufacturing Academy class earns a full two-year scholarship to the technical school. Gene Childress, a Quest developer who previously oversaw Toyota's evaluation of job candidates, led me on a tour of the schools that use the Toyota curriculum. Childress now works at the Center for Quality People and Organizations, a non-profit Toyota created to administer Quest. For Toyota and CQPO, Childress told me, it was all about building pathways for students, "a total package", so that they could travel seamlessly from the lower grades, to high school, to the Manufacturing Academy, to the technical college, and thereafter into work.

When Toyota created Quest, it believed that the Georgetown plant would soon face a shortage of qualified workers. The first employees it hired at the plant would be retiring in the near future. And when the facility last expanded its operations, in 1996, the carmaker had determined that just one of every one hundred applicants seemed likely to fit into the Toyota culture. But the company also assumed that Quest would serve the public good. According to Toyota philosophy, a problem can be solved properly only after a team member first takes time to identify its nature. One of the many student handouts that Childress gave me included a quote from Taiichi Ohno, the father of the Toyota production system: "No one has more trouble than the person who claims to have no trouble". Quest ostensibly provided a formal process for children, whether six-year-olds or teenagers, to define troubling issues and resolve them collectively. In this respect, the program could be seen as doing more than preparing students for work at Toyota. By learning the car company's best practices, students would become better thinkers and more adept at working in teams. Quest advocates contend that the county's children are being prepared for any job or challenge. "I think it leads to better Americans", Steve St Angelo told me.

In a fifth-grade classroom, I saw students using Quest to figure out how to handle a hypothetical bullying issue. A boy, with marker-stained hands an I GOT OUT OF BED FOR THIS? T-shirt, asked the other members of his group, "What should be happening here?" By defining the norm, I was told, the students could figure out what needed to be accomplished. Another Taiichi Ohno aphorism from the student handouts reads, "Where there is no standard there can be no kaizen". Dianne Lloyd, the teacher who was leading the class, said to me, "They've done bits and pieces of Quest since kindergarten. They pull it all together in fifth grade." Lloyd ended the lesson with a review of the roles and responsibilities of Quest problem-solvers. A girl, out of breath in her excitement to answer, explained that a facilitator must remain neutral, so is not like a boss. When Lloyd asked who were team members, the entire class answered in one voice: "Everyone's a team member!

At Scott County High School, Chip Southworth, the director of secondary education in the district, told me that Toyota's presence in the schools was subtle, "not something you actually see". Southworth was wearing a pullover adorned with the insignia of the Toyota Classic, the school's annual basketball invitational, at which a Toyota car or truck is raffled off each year. The high school itself was built when Toyota agreed to advance the district $8 million in scheduled annual payments, after a bond issue to fund construction was rejected by voters. The school's principal, Frank Howatt, surmised that more than half of the student body had a parent or close relative who worked for Toyota or one of its suppliers.

Initially, a few teachers in the district were concerned that a private company, particularly one as influential as Toyota, would have a hand in shaping curriculum and inserting its own ideas into lesson plans. It didn't help matters when teachers were first trained in Quest and all the sample problems dealt exclusively with scratched doors, improperly sealed moon roofs, and other car-related complications. Although Quest in many ways seemed simply to be Toyota jargon for brainstorming and group work, the lessons still presented Toyota as an ideal to be emulated and admired. "The Toyota way is very impressive", the labor historian Harley Shanken told me. "But if you replicate the model in the community, that has many names, and democracy isn't one of them".

I wasn't able to find anyone in the county who was critical of Quest. Most people I spoke to thought it could only be beneficial to share in the practices of a company as successful and innovative as Toyota. Jack Conner, the head of the area's chamber of commerce, rhapsodized to me about the virtues of the curriculum. "This shows what could happen when you use private-sector thinking in public-sector situations", he said, clapping his hands in affected amazement. "Could you imagine what would happen if the private sector took over Washington? There would be an andon cord right there on Pennsylvania Avenue. You'd just pull it, and everything would stop!"

Gene Childress picked up a six-inch Toyota Land Cruiser and displayed the plastic contrivance before eighteen juniors and seniors. "This is what your final product looks like. It's got a chassis, wheels, and all that good stuff." Childress flipped a switch under the chassis and the little car began to whir. A boy reached for one of the vehicles and said, "Oh shit, that's tight". Childress snatched the miniature Land Cruiser from the student's grip. "These are not toys", he scolded.

The gathered students were part of Scott County High School's Manufacturing Academy, and they had been excused from their regular classes to build the Land Cruisers on an assembly line. Spread out over several grouped tables were the vehicle's individual components, each marked with its stage in the assembly process: BODY PREPARATION, GRASS, ACCESSORIES, FINAL. Childress explained that the students' job was to deliver a completed car every ten seconds over a four-minute shift. At this rate, they could produce a total of twenty-four Land Cruisers. More important, Childress would be calculating the average amount it cost the students to build each unit, taking into account expenditures for labor, parts, and finished vehicles with defects. The big semester exam, on which students could earn extra credit by defining such Japanese terms as jidoka and kanban, was still two weeks away. But today's lesson was the crucial test. Childress told me that the simulated assembly line was the culmination of everything the students had learned in the Manufacturing Academy, as well as over the many school years that they had worked with Quest: they would actually be applying Toyota concepts to reduce production costs. Two nine-person assembly lines would run concurrently, competing for the lowest cost per vehicle, with the winning line entitled to first dibs on a pasta lunch.

While Childress issued instructions, a curly-haired boy at the "wheel/axle assembly" table readied himself by organizing his parts into neat groups of four knobby tires and two silver rods. At "accessory", a student practiced clipping plastic bumpers onto Land Cruiser bodies. But the vast majority of students did not busy themselves with preparations. Many of them spent the time before the onset of production reaching beneath the tabletops, pulling phones from pants pockets, then reading and sending text messages. After a few moments, they would repeat the process. Others simply sat impassively, their blank stares as unchanging as masks.

The chaos and inefficiency of the first four-minute run was all but intentional. A boy in a Scott County Cardinals Tennis sweatshirt ran from station to station delivering completed parts, while a burly student, designated the "dealer", rang a bell every ten seconds and shouted for either a red or a blue car. One of the two girls in the class fumbled with a double-A Energizer battery as she tried to put together the motorized chassis at the required pace. "There's not enough time", she cried out to no one in particular. The glass-assembly technician, a solemn bespectacled boy, paused to study the stations around him. He saw that he and "wheel/axle" were the most backed up, and then he stolidly got back to snapping tiny windshields into place. "This is pitiful, y'all", the dealer said as the four minutes wound down. The tennis player, now a bit winded, volleyed back, "You're pitiful".

Classes in the Manufacturing Academy are taught by employees of CQPO, the non-profit funded by Toyota, not by district teachers, and the second assembly line was being overseen by Carl Morse, a local farmer who left the fields in the 1980s to join Toyota. The biggest difference between farming and building cars, he told me, was the monotony of the latter - that and having to work indoors. He was now retired from the plant, and he occasionally helped Childress with CQPO assignments. Morse assessed the low yield of the students in his group, the numerous cars they had in the pipeline at various stages of incompletion. "I worked at Toyota seventeen years", he said to the teens. "You don't see this at Toyota. At GM, Ford, you see this."

When the students were brought together to review the process, Childress told them, "It doesn't make any difference whether you're working at McDonald's, or at school, or at a factory - your job is always to reduce waste". Some students were unable to complete their tasks within the allotted ten seconds; others were done with time to spare. "If it takes you only five seconds to do it, what do we have?" Childress asked rhetorically. "We have waste". The students needed to redistribute the work more evenly among fewer people.

Although all the students had played their parts in the simulation, it was hard to imagine them fretting over a few moments not maximized for greatest efficiency. It seemed even less likely that these teenagers would care how five unproductive seconds could be redirected and better used elsewhere. Up to this point, had anything in their lives demanded such discipline, such fixation on time and output? Even the manufacturing class, taught by two experts in Toyota's lean production system, did not demand this. Childress went off to punch the cost-per-vehicle numbers into a computer, leaving the juniors and seniors unattended and unoccupied. During the lull, many of the students brought out their phones again, now placing them on their tables and engaging in lengthier exchanges. Others returned to gazing ahead blankly, each successive ten-second interval dissipating into unproductive oblivion. One boy, whose shaggy hair was gelled forward as if blown by a ceaseless tailwind, chanted some self-promoting boast to a group of boys seated behind him. "You can't creep like me. You can't expand like me. You can't rush like me." I understood what he was talking about only after he answered another student's question about this professed prowess. "You have to bring those two to the front car, then you start killing them", he explained. I wondered if hours spent mastering a first-person shooter game were considered muda.

For the next four-minute assembly-line shift, students were expected to kaizen the process. Both Childress and Morse extended the word into three syllables, far more central Kentucky than Aichi Prefecture: kai-ZAH-un. The students quickly discovered they could move their tables closer together, thereby cutting down the amount of time it took to pass along completed parts. The reconfiguration also allowed them to eliminate a conveyance job, significantly lowering the cost of production. The groups were told that Toyota often had vendors deliver parts pre-made, so fewer workers were needed on the assembly line. Could they think of any work to outsource? The students whose assembly jobs were made obsolete became, in this exercise, quality-control managers, who would study the system and suggest further improvement. "Look at this real heavy and see if we can combine three jobs into two", Morse advised them. When one of the newly minted quality experts suggested that an idle worker could help out at chassis assembly, where the task seemed more complex, Childress dismissed the idea. "Adding more people is never the first solution. We always want to operate with the fewest number of people."

On the second run-through, both assembly lines improved dramatically, with one team slashing its costs by nearly half. But to trim more, the students were sent back to their groups to perform the scientific management techniques of Frederick Taylor. They were told to run time-and-motion trials on one another, to see exactly how long it took them to complete each task. The student doing the timing was also instructed to look for any nonessential movements that could be eliminated. Ideally, the work would be performed not only more efficiently but also identically each time, Childress explained. As an illustration, he showed one group how lifting a car right-side up with his right hand and then turning it over as it was passed to the left hand wasted valuable seconds. He grabbed the Land Cruiser upside down with his left hand to make his point.

Even as more students lost their jobs on the assembly line, as the remaining workers were forced to take on additional tasks at greater speed, and as the tasks themselves became more routinized, the juniors and seniors were never asked to consider their own interests in this simulation. Instead, they remained singularly focused on the game of reducing production costs. A girl proposed that her teammates on the line work the entire time standing up, since that would allow them to move faster, and Morse had to explain why over eight or more hours this would become physically difficult. When a boy in a Louisville University T-shirt suggested how his team might shed another worker, Childress said, "Exactly. One less person to pay."

Standing nearby, the student with the tousled Caesar-style hair pantomimed pulling back the biggest bow and arrow ever shot on Kentucky soil. He strained, squinted, took aim at the student who had just kaizened out a classmate. It wasn't clear whether the bowman imagined himself to be an original native of these parts setting his sights on white interlopers, or an HR executive lowering the boom on surplus stock, or simply his creeping and expanding video-game avatar. With a whoosh of sound effects, he released an arrow the size of a surface-to-air missile. His target, a mere five feet away, threw himself backward with the force of the imagined shot, stumbling dramatically. As the student mock-struggled to prop himself up against one of the assembly-line stations, he reached for the wound. He placed a hand on the invisible arrow in his heart.

There are Toyota workers who still hope to form a union at their Georgetown plant, and I talked to a group of them at the second-floor office that the UAW maintains in a strip mall less than a mile down the road from the factory. In one room, all four walls are lined, floor to ceiling, with the names of all full-time employees at the plant and whether they had been asked about their union leanings; the UAW told me it is in regular contact with about 150 workers there. Nevertheless, the project of unionizing the plant is certainly daunting. With the auto industry in free fall and overall unemployment higher than at any time since 1983, most workers do not want to appear critical of their employers. The plant would not say how many hourly workers accepted Toyota's buyout package this spring, but any replacements will likely be young and therefore less concerned, at least at this point in their careers, with retirement or the long-term effects of laboring on the line. And today, fair or not, making the argument against a union at a factory like Georgetown's has become as easy as pointing north and saying, "Look what the UAW did to Detroit".

The workers I spoke with at the union office - one had been at Toyota for a decade, all the others for more than twenty years - enumerated their grievances against the plant: the professed commitment to workers was belied by the company's relentless pursuit of profit; the team concept was a ploy to reduce the work force, speed up lines, and use peer pressure to enforce management's interests; there were high rates of injury, large numbers of exploited temps, rising health-care premiums, leaked plans to cut wages, the constant raising of the bar for performance pay. The workers said they had listened, wide-eyed, to a company claim that their 401(k) accounts would each top a million dollars by the time they retired. As these workers recounted the perceived wrongs, as they imagined how having a contract and some guarantees would change life at the plant, the improbable task of unionizing Georgetown became for them a matter of sheer necessity. "Toyota, Honda, Nissan, Kia, Hyundai!, BMW, Mercedes - they have ridden the backs of the UAW members", Tim Unger said. "We've ridden their backs, and they can't carry us anymore. We've broken them down." James Skipper, who as a Republican said he was an unlikely union supporter, described telling a young colleague on the night shift that if they didn't act soon, they were eventually going to be earning $15 an hour, their bodies worn down by overwork.

"I don't think people in industries that have nothing to do with auto realize how our earning this wage helps them", Skipper said.

It was hard not to think that the battle had been lost long ago. Indeed, I wondered whether non-union Toyota, as the new automotive leader, represented nothing less than the high end of the lowered options that are now available to working-class Americans. Today, just nine percent of US workers hold manufacturing jobs, and unions represent twelve percent of the workforce. The standard-bearer of the old, twentieth-century corporate model - unionized GM - is in bankruptcy, from which it has proposed to emerge by closing plants at home and importing cheaper cars from abroad. Meanwhile, at the emblematic corporation of this century, Walmart, hourly workers are treated as expendable, with turnover at many stores exceeding fifty percent a year. Even in service-sector jobs at businesses on Fortune's 100 Best Companies to Work For list, such as non-union Whole Foods and Starbucks, employees are paid just above minimum wage and' benefits are being repeatedly downgraded, all in the service of a business model that relies on young workers quitting after a short time.

In terms of pay, retention, and training, the veteran workers at Toyota resemble their unionized GM counterparts of a generation ago less than they do managers at many service-sector businesses. Walmart, for instance, helps fund and operate Students in Free Enterprise, an organization that recruits potential store managers from hundreds of universities across the country; the company indoctrinates its managers with an institutional ethos that purports to be egalitarian and that is decidedly anti-union, and its managers are willing to take on tightly defined and closely monitored jobs, as well as uncertain job security, in return for their mid-to high-five-figure earnings. Toyota spends a great deal of money and effort ensuring that its workers feel a similar shared fate with - and maybe, by necessity, a fervent faith in - their highly successful employer.

All the workers at the UAW office told me that they at first bought into the Toyota philosophy of continuous improvement and respect for people. No other employer had asked to hear the insights into production and design that they developed during long hours on the job. Like all workers, they wanted to be valued, and they took genuine pride in building a quality product and helping the company prosper. "About nineteen years ago the honeymoon ended", said John Williams, who left the Lexington phone company for a job at Toyota twenty years ago. "It turned into a business just like any other business".

Listening to Williams and the others, I thought of something Gene Childress had said near the end of the assembly-line class, when he told the students what kinds of employees they would need to be when they sought jobs in the "workplace of the future". In addition to working more and better than anyone else, Childress said, they would have to work unsupervised while using only the resources made available to them. This was the hyper-efficiency and resourcefulness already expected from Toyota team members and line workers at other non-union auto plants. Although many of the students seemed not to be listening, Childress made it plain that in the current economic climate, as well as in this imagined future one, the arduous and uncertain job was the best job they were likely to get.

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Ben Austen is a contributing editor of Harper's Magazine. He lives in Nashville.